On Friday 26 September, arriving in Liverpool for the Labour Party conference, Prime Minister Andy Burnham announced a new equity loan scheme for first-time buyers called Your First Home. It is, in substance, the return of Help to Buy: a government loan sitting alongside a small deposit and a mortgage, aimed at people buying a new build.
The headline is a deposit of 2.5%. Full details are due from Chancellor John Healey at the Budget on 28 October, with pre-registration expected to open before the end of the year. Until then, a good deal of the scheme is still unwritten — so this piece separates what has been confirmed from what has not.
The short version
First-time buyers in England buying a new build could put down a 2.5% deposit and borrow a further 20% of the price as a government equity loan, interest-free for an initial period. There will be caps on household income, on how much deposit you already hold, and on the price of the property. The cap figures come at the Budget.
What has been confirmed
- A 2.5% deposit. On a £230,000 starter home — the figure used in the announcement — that is a deposit of £5,750.
- A 20% equity loan. On the same property, roughly £46,000 from the government, with the buyer’s mortgage covering the remaining 77.5%.
- An initial interest-free period on the equity loan, which is what makes the monthly cost lower than a 95% mortgage.
- New build homes only. This is not a scheme for buying an existing home.
- England only, and first-time buyers only.
- Caps in three directions: a household income cap, a cap on the deposit you already have, and a property price cap set regionally. The Government has said the price cap runs up to £600,000, with lower local limits.
What has not been confirmed
Quite a lot, and it is the part that will decide whether the scheme works for any given buyer:
- The actual cap figures. The income cap and the local price caps are due at the Budget on 28 October. Whether a scheme works in Birmingham or Leicester depends entirely on where those land.
- How long the interest-free period runs, and what the equity loan costs after it ends.
- The repayment terms. Under the old Help to Buy, you repaid a percentage of the property’s value rather than the cash you borrowed — so if the home rose in value, you repaid more than you took. Whether Your First Home works the same way has not been set out.
- Which lenders will take part, and how they will price a mortgage alongside the loan.
- The start date. Pre-registration is expected before the end of 2026; completions will be later.
If you are thinking about it
There is nothing to apply for yet. The sensible thing to do before the Budget is to find out what you could borrow on a mortgage, and to understand what the purchase will cost you in tax and legal fees — because those do not change because of a government loan.
What it means for the legal side
If the scheme follows the shape of Help to Buy, a purchase using it is more involved than a standard one, and that has practical consequences.
There is a second lender in the transaction. An equity loan is secured by a second legal charge over the property, behind your mortgage lender’s first charge. Your solicitor deals with the scheme administrator as well as your mortgage lender, and both sets of requirements have to be satisfied before completion. It is a common source of delay, and it is why a purchase under a scheme like this generally attracts a supplement over a straightforward one.
New build brings its own work. Plot sales run to the developer’s contract rather than a standard one, deadlines for exchange are often short and contractual, and title to a plot on a new estate needs checking against the estate layout. If you are buying off-plan, ask early what happens if the build is late.
Stamp Duty is unaffected by the loan. This is the point most commonly misunderstood. Under Help to Buy, Stamp Duty Land Tax was payable on the full purchase price — the equity loan was not treated as separate consideration and did not reduce the bill. On current rates, a first-time buyer pays nothing up to £300,000 and 5% on the portion between £300,000 and £500,000, with the relief lost entirely above £500,000. Budget for the tax on the whole price, not on your share of it.
Selling later is a separate transaction. Repaying or porting an equity loan when you sell or remortgage involves the scheme administrator again, and usually a valuation. Worth knowing at the outset rather than in year five.
A note of caution
Help to Buy was criticised on two grounds that apply equally here, and they are worth stating plainly rather than leaving to the small print.
The first is that demand-side support can push new build prices up, so part of the benefit is absorbed by the price rather than reaching the buyer. The second is the repayment structure: if the loan is repaid as a percentage of value, a buyer in a rising market repays materially more than they borrowed. Neither point makes the scheme a bad choice — for many people it will be the difference between buying and not buying — but both are reasons to read the terms when they are published rather than the press release.
We will update this page once the Budget confirms the detail on 28 October.
Where ConveyQuote fits
We give you a clear, itemised conveyancing quote from a regulated firm before you commit to anything — legal fees, disbursements and Stamp Duty set out separately, so you can see what the purchase actually costs. Get a quote, or work out the tax first with our Stamp Duty calculator.
Sources: the Prime Minister’s announcement of 26 September 2026 and the accompanying Government press release, New first-time buyer scheme to be confirmed at Budget. This article is general information, not legal or financial advice, and describes a scheme whose terms are not yet final.
Related reading: the home buying guide · understanding conveyancing fees · Stamp Duty calculator.